Greece wants lenders to agree bailout review without bank deal

ATHENS (Reuters) - Greece has asked its international lenders to approve its latest bailout review despite an unresolved dispute over how much new capital its banks need, a senior finance ministry official said on Wednesday.

Greece no longer expects an overall deal with the lenders by next week, the official said.

In further signs of friction over the bailout, Greece will release the results of its second health check on its banks later this week, without the formal approval of the ‘troika’ of lenders, a central bank official said.

The row over how much extra funds Greek banks need after a health check up, along with delays in implementing changes meant to make the economy more competitive, have been the main stumbling blocks delaying the approval of further aid.

The Bank of Greece sees the top banks needing 5.8 billion to 6.2 billion euros ($8 billion to $8.5 billion) in extra capital after the stress test but the troika of international lenders has put the need at 8-8.5 billion euros, a source close to the talks has told Reuters.

“The disagreement between the troika and Greece on banks should not be the reason not to conclude the review,” the official said, declining to be named.

“This means that Greek banks will be recapitalized based on the Greek central bank’s (stress test) results. When the European Central Bank’s stress tests come out, and if there is a difference, then additional capital will be provided,” the official said.

“The final settlement will come with the ECB stress test results.”

But the IMF is resisting that plan, the official said.

The central bank is keen to release the stress test results to remove market uncertainty. Estimates on banks’ capital needs have ranged widely - from 4.5 billion to 15 billion euros. Greece also wants to speed up the delayed privatization of its third biggest lender, Eurobank.

Without an overall agreement with its lenders, Athens will seek a statement of political support at Monday’s meeting of euro zone finance ministers, to note that there has been progress on many fronts albeit with some remaining open issues, another official said.

“The final decision could be taken later, with an extraordinary Eurogroup or even via teleconference,” the official said, declining to be named.

Greece’s bank rescue fund (HFSF), which recapitalized the top four banks last summer, has a remaining buffer of about 8 billion to 9 billion euros to address any additional needs, the central bank has said.

Athens, which has been bailed out by the European Union and IMF twice since 2010, has no pressing funding needs until May when bond payments of nearly 10 billion euros are due. At least 8 billion euros would be released under the bailout once there is a deal. ($1 = 0.7278 euros)

Reporting by Lefteris Papadimas; Additional reporting by George Georgiopoulos; Writing by George Georgiopoulos; Editing by Ruth Pitchford